Shelving Trophies

On Monday, the rare-maps dealer W. Graham Arader III was in the passenger seat of his black Mercedes SUV, thinking about all the wealthy people who have not bought his 12,000-square-foot, 22-room, 10-bedroom townhouse at 1016 Madison Avenue. “People have been clubbed to death by recent events,” he said. “The seals in Alaska had it better under the fur traders that came up and clubbed them to death. They’ve been clubbed to death.”

His mansion’s tag was cut in February from a city-leading $75 million to $65 million. Last month, records show, it quietly left the market.

“I think the era of mega-sales is definitely over; we all know that by now,” Brown Harris Stevens managing director Sami Hassoumi explained this week. Three years ago, he sold the city’s most expensive townhouse, the $53 million Harkness Mansion, which he’s reportedly now marketing for millions less than it cost.

Kirk Henckels, the bow-tied director of Stribling Private Brokerage, calls it the end of the trophy: Prices are plummeting for New York’s most hilariously expensive listings, like his Astor duplex at 778 Park Avenue, and the wildly rich, even the billionaires, are buying prudently, if at all.

But along with top brokers’ stoic acceptance that the good days are over is a grinning confidence that they’ll be back. The almost needlessly titanic trophy sale will return, they say, but it will take years.

THINGS WERE DIFFERENT VERY recently. Last year, a hedge fund manager and his young wife spent $46 million on a duplex penthouse at 1060 Fifth Avenue, more than a New York City co-op had ever cost. It’s not that the place was even in pristine shape—its two levels were uncombined—it’s that New Yorkers were clamoring to pay awesomely unreasonable premiums to own glittery Manhattan real estate, even as the national housing market collapsed.

The sums were literally unprecedented. In July, without doing major work, the couple sold the penthouse for $48.9 million, retaking the co-op record from a $48 million deal at 2 East 67th Street that had closed two weeks earlier. At that sumptuous apartment house, three apartments are now on the market asking a total of $103 million. A fourth was pulled last month without a closed sale.

“Money had no meaning,” Mr. Henckels explained Friday. “You had to club them away. And now you’re out there pulling them in the door.”

John Burger, who listed the 1060 Fifth apartment when it sold for $46 million, pointed out on Friday that hugely posh buildings used to have only one apartment on the market at a time—“and the buyers would be lined up at 30-minute intervals in the lobby waiting to see it.”

It was the magical tautology of New York luxury real estate: Supremely grand homes sold grandly because they were supremely grand homes! Humdrum technicalities like price per square foot were beside the point: Proper co-ops don’t even share square footage numbers. “If somebody loved something, and the asking price seemed 5 or 10 percent too high, they didn’t care,” said Mr. Burger, who was talking in a Hamptons garden where blue jays and cardinals and catbirds were chirping. “Time would solve the fact that they were paying a premium.”

But that’s not what happened. The week that Lehman collapsed, the high-end Brown Harris Stevens broker Kathy Sloane told 20/20 that Manhattan’s finest co-ops “may have already lost a fourth of their value as a result of the financial crisis.”

Not only were brokers panicking, but there was panic about their panic. Even before Ms. Sloane’s interview aired on television, Brown Harris’ aristocratic president Hall F. Willkie issued a press release calling her comments “completely speculative, and at times factually incorrect.”